India rejects Chinese company BYD Motors $1 billion plan to build EVs, batteries over security concerns

New Delhi, July 22: In yet another rejection of Chinese company's entry into India, the Central government has shut down BYD Motors and Megha Engineering and Infrastructures Ltd (MEIL)’s proposal to establish a $1 billion four-wheeler manufacturing facility in India.

 

 

The proposal was submitted to the Department for Promotion of Industry and Internal Trade (DPIIT). It included plans for an electric vehicle manufacturing unit in Hyderabad. The DPIIT solicited feedback from many departments in order to evaluate the investment proposal.

 

This came after concerns about security risks relating to Chinese investments in India were highlighted during the discussions. Security issues were highlighted during the vetting process of BYD Motors and Megha Engineering and Infrastructures Ltd’s proposal, resulting in its rejection by the Centre. Reportedly, the venture proposed to the DPIIT that it will produce 10,000-15,000 electric cars each year.

 

 

Notably, the government amended its foreign direct investment policy in April 2020, making government clearance mandatory for projects from countries with which it shares a land border. Such recommendations are decided upon by a committee chaired by the Home Secretary.

 

Though no country is mentioned in the policy, it was meant to prohibit Chinese firms from purchasing entities in India amidst the growing India-China tensions along the border.